The Luck Factor Summary (Review & Book Notes)

If you ever wanted to understand how luck works, this is the book you want to read. It presents a couple of very interesting ideas to understand luck, and how we can make it work in our lives.

If you ever wanted to understand how luck works, this is the book you want to read. It presents a couple of very interesting ideas to understand luck, and how we can make it work in our lives.

Authors: Max Gunther

Originally published: 1977

Pages: 240

Genre: Philosophy

Goodreads rating: ⭐️ 3.75/5

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What’s Luck?

Luck: events that influence your life and are seemingly beyond your control.

The human intellect is always trying to make order. Luck is always making chaos. No matter with what care and cleverness you plan your life, luck will surely change the design. With good luck, any half-baked plan will get you somewhere. With bad luck, no plan will work. This is the frustrating characteristic of luck. It is the element that must be, yet can’t be, taken into our plans.

Heraclitus remarked some 25 centuries ago that character is destiny, and several million plays and novels since then have tried to prove the point. They have not proved it because it is only part of a truth. Character does indeed make destiny, but destiny also makes character. A man’s or woman’s route through life is determined partly by what is inside: the degree of courage, the oomph, the fortitude, the fervor of hope and dream. But that stuff inside is shaped partly if not wholly by events and other personalities impinging from outside.

The Randomness Theory

Things that happen to us seem incredible because the odds against them are so huge, but whatever happens to me was bound to have happened to somebody.

For the randomness theory holds that the laws of probability aren’t really all that lawful.

There are two cardinal laws to keep in mind.

First law: anything can happen.

Second law: if it can happen, it will.

It will – sooner or later, given enough random events happening to enough people over a long enough span of time. When some fluky or scary coincidence takes place, when events cluster into a pattern against which the odds seem nearly infinite, the people involved are, of course, overwhelmed with surprise and may start speculating that mystical or psychic forces are at work. As Martin Gardner puts it, trillions of events, large and trivial, happen to billions of humans every day on earth. In this vast turbulent sea of endless happenings, it would be astonishing if coincidences didn’t occur from time to time.

As a mathematician, Martin Gardner is fascinated by numerical coincidences. Some people believe these aren’t mere chance patternings. Gardner, being a randomness man (and a more than normally assertive one at that), insists they are.

Coincidences happen to everybody. Most of them are trivial and elicit nothing more than a vague feeling of puzzlement, a grin, a shrug.

There are certain kinds of coincidences and apparent strokes of luck and other situations in which our common sense fools us badly. The situations seem wildly unlikely, seem to violate the laws of probability, but in fact the laws are always working perfectly well. The situations are much more likely to happen than we think.

Randomness people also cultivate a casual attitude toward runs of luck, which fascinate everybody else. A “run,” as usually defined, is a species of coincidence in which bits of good or bad luck get clumped together in a certain time span or sequence of win-lose events. Everybody experiences such runs. There are days when everything you touch turns to gold, and there are other days when everything turns to – well, let us be polite and call it dust and ashes. If you play bridge or poker or some other card game, you are keenly aware that there are nights when you pick up one golden hand after another, and there are other nights when you wish you had gone to the movies instead.

What causes it? The randomness theory offers its usual sensible-sounding and faintly surly explanation. Runs of luck? Naturally. When events are happening at random, they are bound to bunch and cluster here and there.

It is even possible to make mathematical predictions about the degree and frequency of such clustering.

In this sense, luck is an unmanageable element in randomness theory – unmanageable whether in games of chance or in the more serious business of living (which is itself a huge game of chance). The theory can pronounce the odds for and against a given outcome, but there it stops, baffled.

The Synchronicity Theory

At the time of his too-early death, Montmort was just beginning to toy with the notion that subtle flaws might exist in the laws of probability as worked out by mathematicians. The laws work well on paper but less well when applied to the daily lives of men and women. The laws seem logical, but in that fact may be the most profound error of all. For our concept of “logic” may itself contain basic flaws. “Logic” is a human construct, after all – a set of laws that seem to work tolerably well for our purposes on earth but may in fact have little to do with the way the rest of the universe works. As mathematician Kurt Goedel has pointed out, we may never discover what those logical flaws are. If our basic system of logic is wrong, it seems unlikely that we will ever identify the wrongness by applying more of the same wrong logic. Thus we may be trapped for all eternity in flawed ways of seeing and thinking, including flawed ways of thinking about luck.

An Austrian biologist, Paul Kammerer, seems to have been the first to give a name to this notion of a different kind of probability. He called it “seriality”.

To Kammerer such coincidences were significant. They pointed to some unknown force that, in his view, made like and like come together, made things happen in bunches rather than randomly.

Carl Jung, the Swiss psychologist-philosopher-mystic, coined the term “synchronicity”. His ideas on the topic were much like Kammerer’s.

There is an unknown “ordering” principle at work in human affairs, he postulated. It is “acausal” – that is, it operates by some mechanism that does not depend on cause and effect as we understand them.

The man who has probably tried hardest is Arthur Koestler.

Koestler has become perhaps the leading modern disciple of synchronicity – and without doubt its leading publicity agent.

He asks: If luck is random, why are we always bumping into this “spontaneous emergence of order from disorder”?

Things aren’t as random as they seem, the synchronists insist. There are underlying patterns, hidden forces quietly straining to make order out of chaos. If we want to understand luck, all we need to do is understand how the patterns work.

Numerology

Numerology, which calls itself a science but perhaps doesn’t quite deserve to, is based on this very thesis: that there is a mysterious connecting link between numbers and the events in human life. If the numbers are lucky, the events will supposedly be lucky, and if not, not. Does that make sense? Well, no, not to everybody. But it is certainly not difficult to see why some people have become obsessed with numbers and have attributed magical or predictive powers to them.

Destiny and God

Some people believe there is a God, while others do not, and still others are not sure. Among those who believe such a being exists, there are hundreds of theories – perhaps thousands – about the nature of this being and his relationship to us mortals on earth. But in terms of luck, the believers can be said to fall into two large groups.

One group holds that, though God created us and has some general interest in our welfare, he makes no attempt to exert detailed control over our individual lives. He is fond of the human race at large but doesn’t specifically worry about the outcome of your life or mine. In this theory, we are put on earth to struggle along on our own, find our own luck, hack our way to our own dim destinies with neither help nor hindrance from above.

The second group of believers, perhaps larger, holds that God does concern himself with each individual life. He puts each of us on earth for some purpose of his own and carefully manipulates each life so that the purpose will be properly accomplished. When you were born, this theory contends, God already knew what he wanted you to do with your life and what your destiny was to be. Whatever has happened to you since then was part of his plan. Luck, in other words, falls under the power, design and benignance of God’s will.

Charms and Signs

To infer a cause-and-effect relationship from mere proximity. When two events happen simultaneously or consecutively, it may or may not be true that one is the cause of the other. If a black cat crossed your path last week and you broke your leg this week, it may be unjust to blame the cat.

On the other hand, some insinuate. . . who knows? It may be just as bad a fallacy to deny the existence of a causal link only because you can’t see it. Devotees of astrology and other occult and mystical beliefs regard this thought as a main supporting pillar – however shaky – of their various rationales. They charge that our hard, practical, thing-oriented culture grants too little room to anything that can’t be weighed, measured, or analyzed in a computer. “Just because a thing can’t be explained in terms of your materialistic Western science,” they say, “that’s no reason to . . .”

The Spiderweb Structure

In general, and with exceptions, the luckiest men and women are those who have taken the trouble to form a great many friendly contacts with other people.

If you hope to luck into some pot-of-gold opportunity through a stranger or acquaintance or friend of a friend, the truth illustrated by Catherine Andrews’ story seems obvious. The bigger your web of friendly contacts, the better the odds in your favor. You cannot know what thunderbolt of good fortune is being prepared for you now by some distant engine of fate. You cannot know what complex interconnection of human relationships will guide the thunderbolt in your direction. But you can know, with certainty, that the probability of your getting hit is directly proportional to the number of people who know your name.

Dr. Stephen Barrett of Allentown, Pennsylvania, is a psychiatrist who has done a good deal of thinking about this difference between the lucky and the unlucky. He finds that lucky people as a breed not only have the knack and habit of initiating friendly contacts often. They also have a certain magnetism that makes them the targets of other people’s friendly approaches. Dr. Barrett calls this magnetism a “communication field. . . It seems to say, ‘Come and talk to me, we’ll get along.'”

Many of Dr. Barrett’s patients are high-school girls and college women. For many years, he says, he puzzled over the “dateless-girl phenomenon” – a phenomenon that is familiar in all groups of young people but that few can explain well. The girl who never gets asked out may be as bright and pretty as her more socially active friends – indeed, in some cases may seem to be among the most attractive sexually on the local scene. Her dateless condition may appear on the surface to be a case of random bad luck – the right boy hasn’t turned up yet – or may be ascribed to circumstances such as belonging to the wrong clique or having an over strict mother. But it usually turns out, Dr. Barrett says, that the root of the problem is something in her manner – a communication field – that scares boys, makes them uncomfortable, turns them away. “This same communication field may turn away other girls too. She may be an all-around loner – but the baffling fact, to her, is that she doesn’t want to be and can’t understand why she is. I’ve had this kind of girl crying in my office many times.”

What is this communication field made of? Dr. Barrett believes there may be hundreds of components: facial expressions, body positions, voice tones, choices of words, ways of using the eyes and holding the head. This cluster of mannerisms is difficult to analyze piece by piece, but the total effect is clearly visible to other people. “We all know instinctively whether somebody likes us or doesn’t like us,” Dr. Barrett says. “We know whether someone is friendly or unfriendly, warm or cool. We can meet a total stranger and know in seconds whether the stranger does or doesn’t want to spend more time with us. In general, people who are considered lucky – people who get lucky breaks handed to them by other people – are those whose communication field is inviting and comfortable.”

One reason why fakery cannot succeed, evidently, is that at least some elements of your communication field aren’t under voluntary control. The size of your pupils, for example. Dr. Eckhard Hess, a University of Chicago psychologist, has been studying this peculiar phenomenon for years. He finds that pupil size isn’t affected only by the intensity of light, but by whether you like what you are looking at. When you look at something or someone you like, your pupils dilate. When you don’t like the view, they contract. Dr. Hess believes this size change is one of the most telling signals that people send to and receive from each other, unconsciously. The eyes, of course, are among our most important instruments of communication. We talk about eyes as warm, shining, steely, cold, and so on. Dr. Hess believes we make these emotional judgments largely on the basis of pupil size. If you talk to somebody and your pupils are small, you may be judged unfriendly even though you are grinning from ear to ear.

Dr. John Kenneth Woodham, a New Jersey psychologist, is another man who is intrigued by what he calls the “loner syndrome.” He agrees with the proposition that lucky breaks often come through other people, and that a loner is therefore unlikely to be lucky. “In any case,” he says, “it’s no fun to be a loner even if this question of lucky breaks didn’t enter the picture. You hear about lone wolf types who are supposedly happy the way they are, but frankly I’ve never met one. I don’t think any human enjoys isolation. That’s why I urge isolated people to go out and talk to others, not only people they already know but also strangers. Especially strangers. If you’re scared of other people or scared of rejection, the quickest cure is to go out and deliberately make contact. Notice what I said: ‘cure.’ A psychologist doesn’t use that word unless he’s very, very sure he means it. When you reach out to other people, their response is always delightful. The more you do it, the more you enjoy it.”

And the more you enjoy it, presumably, the bigger your pupils grow. If you feel your spiderweb structure is too small, Dr. Woodham’s counsel would be that you begin by talking to total strangers, at random, about anything. He points out a peculiar fact: that one of the quickest ways to bring a smile to a stranger’s face is to ask for help, even trivial help.

The Hunching Skill

A hunch is a piece of mind stuff that feels something like knowledge but doesn’t feel perfectly trustworthy. Some people trust their hunches more than others do, and of those hunches that are trusted, some turn out to be accurate while others do not. It is obvious that a capacity to generate accurate hunches, and then to trust them and act on them, would go a long way toward producing “luck.” Lucky people as a breed do, indeed, have this capacity to a notable degree.

Where does an accurate hunch come from? Many psychologists and other authorities think they can explain it without resorting to ESP or the occult. In essence, the theory is this:

A hunch is a conclusion that is based on perfectly real data – on objective facts that have been accurately observed, efficiently stored, logically processed in your mind. The facts on which the hunch is based, however, are facts you don’t consciously know. They are stored and processed on some level of awareness just below or behind the conscious level. This is why a hunch comes with that peculiar feeling of almost-but-not-quite-knowing. It is something that you think you know, but you don’t know how you know it.

One definition of “luck” would certainly be this: Luck is being somebody whose emotional troubles never get bad enough to require professional help. Luck is having a serene life, with occasional bright splashes of joy.

A hunch is built of data that you can’t quite pull up to the conscious level – facts that you can’t list, can’t identify, can’t exhibit to prove the reliability of your conclusion to anybody else (or indeed to yourself). Yet if the hunch is a good one, the facts do exist. They are stored inside you somewhere. True, it is frustrating not to be able to get at them and inspect them. But the mere fact that they aren’t available need not nullify the power and usefulness of the hunch. You can drive a car without necessarily knowing how the engine is put together.

Whether we like it or not, life requires us to hunch our way constantly through big decisions and small. Should I take this job? Is this realtor telling me the truth when he says the cellar doesn’t leak? Will this woman be angry if I . . ? Seldom do we have quite enough facts. Seldom can we make exclusively rational deductions and decisions. Unlike Sherlock Holmes, who could always supply a magnificently logical explanation for each of his conclusions, we ordinary thinkers more often find ourselves making choices that we can’t quite explain. “I bought the house because – well, because it felt right.” Lucky people, as a group, often turn out to be people whose hunches at life’s major and minor crossroads are trustworthy. They are people who never buy houses with leaky cellars. They never drive out of used-car lots with lemons. They never buy stocks just before bear markets begin. They never get stuck in the slowest lines at airport ticket counters. Their domestic, social, sexual, and economic lives are serene.

If you want good luck, the hunching talent is a useful if not essential piece of equipment. How can you develop it?

There are three major rules to follow.

The First Rule: Learn to assess the data base

A hunch comes unbidden: a strong feeling that such-and-such is true. How do you know whether to trust it? The first part of the answer, in C. C. Hazard’s words: “I ask myself how solid the underlying data base might be. Obviously I don’t know what facts this hunch is based on and have no hope of knowing them. But what I can do is ask whether these facts might exist. I ask: Is it conceivable that I’ve gathered a pool of data on this situation without realizing it? Have I been in a position to gather these facts? Even though I can’t see them, is it reasonable to think they are there? If the answer is yes and if the hunch feels strong, I tend to go with it.”

“A hunch is only as good as the sum of past experience that produces it,” says Dr. Natalie Shainess, a New York psychiatrist who has studied the differences between people who do and don’t consider themselves lucky. “You can trust a hunch only if you’ve had experience in the situation it deals with.

When a hunch comes, always ask yourself whether the underlying facts could be there. Ask whether you could have absorbed data about the situation. This is the First Rule of hunching. Under it we can list these corollary rules:

Corollary 1: Never trust a hunch about somebody you have just met

Unlucky people tend to make commitments on the basis of first impressions. Lucky people go back for a second look.

If you met somebody half an hour ago and have already developed a hunch about his or her honesty, goodwill, intelligence, or other character traits, dismiss the hunch as unreliable. You probably have not had time to absorb enough data. Love at first sight is fun but very, very chancy. Second sight and third sight are better. Hindsight, when it tells a story not told by first sight, can be painful.

Never commit either your emotions or your money on the basis of a first-sight hunch.

Corollary 2: Never fall back on hunching to avoid work

First find out all you can about the situation in which you need to make a decision. Steep yourself in it. Hungrily seek the facts of it. Try to reach your decision first on the basis of consciously known data. If you can’t, then fall back on hunching – but only then.

The wish to avoid work – which may spring from many diverse roots, including plain laziness – produces very bad hunches. They are hunches without factual substance. In fact they are not true hunches at all. They are only daydreams.

Any time you want to act on what you fondly think is a hunch, ask yourself earnestly whether you are merely inventing an excuse for avoiding honest study – or for avoiding people who might answer your questions.

The Second Rule: Never confuse a hunch with a hope

If a hunch tells you something is true, and if you badly want it to be true, regard the hunch with suspicion.

The Third Rule: Make room for hunches to grow

Hunches are made of facts, but they come as feelings. According to Dr. Eugene Gendlin, “Many people or most are not really in touch with their own feelings.” This undoubtedly is a reason why many men and women, perhaps the majority, lack a well developed hunching talent. To hunch soundly you must listen to your feelings, respect them, give them a full hearing. This rule is probably the most crucial of the three.

Corollary 1: Don’t smother a hunch by “figuring out”

If you insist always on approaching problems and decisions in a strictly analytical way, dealing only with those parts that can be tidily described in words and related to consciously known facts, you are imposing very great restrictions on yourself.

Corollary 2: Collect “soft” facts along with hard

Soft facts are feelings, impressions – or, to use a fad word of the 1960s, “vibrations.” Hard facts – the overt, the objective – seem more real to many people. Many, as a result, restrict themselves to observing hard facts alone and dismiss all other observations as irrelevant, trivial, or unreliable.

It takes courage to collect soft facts that can’t be backed with objective proof – and that may be a reason why the man has avoided doing so.

“The ability to perceive vibrations improves with practice,” says New York psychiatrist Dr. Abraham Weinberg.

The Boldness Skill

“Fortune favors the bold,” says the old Latin aphorism.

As a group, lucky people tend to be bold people. The most timid men and women I’ve met in my travels have also been, with exceptions, the least lucky.

Why is this? It could be pointed out first that luck probably creates boldness. If life hasn’t hurt you a great deal, you are probably somewhat more willing to take chances than somebody whom fortune has often kicked in the face.

But it also works the other way around. Boldness helps create good luck. The old Latin aphorism is not unequivocally true, but it turns out to have some very important elements of truth in it.

The First Rule: Be eternally ready to inspect lucky opportunities when they drift into view

The luckiest people I know haven’t lived their lives in a straight line but in a zigzag. It’s a mistake to get stuck on one track. You’ve got to be ready to jump off in a new direction when you see something good.”

“Luck comes to the mind prepared,” says another of those hoary aphorisms. To put it another way, little bits of potential luck drift past nearly everybody from time to time. But they are only of value to those bold enough to reach out and grasp them. Dr. Charles Cardwell is a philosophy professor at the Virginia Polytechnic Institute who has pondered the role of luck in life. He suggests that a distinction be made between the words “luck” and “fortune.”

Dr. Cardwell says: “You hear it said that people make their own luck. But if you take ‘luck’ to mean chance events, happenstance, then the statement isn’t true. Luck happens to everybody. You don’t make your own luck. It comes and goes on its own. But you can make your own fortune, by staying alert and using luck wisely.”

The Second Rule: Know the difference between boldness and rashness

If you bet your life savings on a spectacular venture in which you stand to lose everything, that is rash. If you accept an exciting new job opportunity even though it isn’t on your straight-line route, even though you are scared by the thought of stepping into the unknown, that is bold.

“Men and women who call themselves unlucky are often notably passive people,” says psychiatrist Dr. Abraham Weinberg, who has spent years studying differences between the lucky and unlucky. “They tend to let life happen to them instead of using its opportunities in an assertive way. Often they are afraid of change itself, even change without risk. They tell themselves, ‘I’m afraid of going into this new situation,’ even when the situation holds no objective terrors except its newness. Instead of examining the situation and finding what the risks actually are, they simply drop out by saying, ‘No, it’s too much of a gamble.’ It may not be a gamble at all. They are only making an excuse for staying in some familiar territory.”

It is very easy to talk yourself out of a scary and challenging venture by calling it “rash.” That one short word gives you a wonderful excuse for not doing anything – an excuse that may be almost unassailable. It has a sensible sound, a sound of reliable old folk wisdom. “Take no chances and you won’t get hurt.” You probably won’t – but you may not cover much distance toward your personal goals either.

If you want to improve your luck, it is essential to study this distinction between the rash and the bold. Badger yourself about it. Force yourself to appraise situations honestly when they frighten you. It may turn out that you have been using “rash” as an excuse to avoid taking minor chances.

It is true that when we take chances, we stand to lose. But it is also true that we will never win anything if we never even enter the game. Lucky people are aware of the possibility of losing, and indeed they may lose often. But since the chances they take are small, the losses tend to be small. By being willing to accept small losses, they put themselves in a position to make large gains.

Fortune favors neither the timid nor the rash. (The rash, however, do get a lot of exciting rides for their money.) Fortune favors the bold because they operate from a firm middle ground between the two extremes. They are not afraid to move once they determine that the odds are solidly on their side.

The Third Rule: Don’t insist on having total advance knowledge of any situation you are about to enter

In almost any venture, there comes a time when you must stop gathering facts and boldly make a decision to go or not go. There seldom are quite enough facts. You seldom know everything you could wish to know. It makes perfectly good sense to inform yourself about a situation as well as you reasonably can, but there is always a point beyond which further fact-finding brings diminishing returns. If you pass that point and still take no action, still go on saying, “I’m studying it . . . I’m checking it out,” you may only be making an excuse for timidity – another excuse like “rash.”

Almost anything you can do to avoid this paralysis of endless fussing will help you. This is why it won’t necessarily do you any harm and may, potentially, be tangibly useful if you hold a minor mystical belief – what others might call a “superstition.”

When I began talking to the lucky and unlucky many years ago, a puzzling fact became apparent to me very quickly. With exceptions, spectacularly lucky people are superstitious.

Think of a superstition simply as a neat psychological device that can come to your aid in moments of worry, confusion, and indecision. In a situation where you must make a choice but are intimidated by the shortage of facts, a good, friendly superstition helps you avoid paralysis. When you have done all your homework, when you have diligently gathered all the essential facts of the situation, and when you still don’t know what course to take because the available facts aren’t enough, then a superstition is something to fall back on. It can relieve you from worrying and fussing over a choice that can’t be improved by worrying and fussing. It helps make you bold.

Seen in this light, the high incidence of superstition among the lucky maybe becomes easier to explain. Lucky people are lucky perhaps because, among other things, they often instinctively use superstitions to embolden themselves, make themselves more decisive.

No amount of fact-finding, no amount of figuring-out will change the odds or affect the outcome. This is where a superstition can make itself useful. It helps you make a choice quickly and relatively painlessly in the face of inadequate data.

Thus, if you harbor a mild superstition, treat it as a “friend”. Laugh at it in public if you like, but cherish it in private. It will help you decide which door to open.

A friendly superstition not only helps you make choices in fact-short situations. It can also enhance your general feelings of confidence and competence – which are both components of boldness.

A superstition isn’t likely to be harmful unless you use it in place of rational processes. It should come into play only when you have done your best to solve the problem or make the decision with straightforward thinking and hunching and plain hard work. It takes over where your own efforts end. An ancient piece of counsel assures us that “God helps those who help themselves.”

The Ratchet Effect

A ratchet is a device that preserves gains. It allows a wheel to turn forward but prevents it from slipping backward.

Lucky people typically seem to organize their lives in an analogous way. They know that almost any venture can lead to either loss or gain. At the outset it is impossible to know which way the wheel will turn. But if it starts to turn the wrong way, the lucky are prepared to stop it. They have the capacity to get out of deteriorating situations quickly. They know how to discard bad luck before it becomes worse luck.

If the ratchet effect seems simple to understand, why can’t everybody practice it successfully? It turns out that, for many, and perhaps the majority, two great emotional obstacles stand in the way.

The First Obstacle: It’s too hard to say “I was wrong”

In an intriguing 1973 book, Psyche, Sex and Stocks, psychiatrist Stanley Block and psychologist Samuel Correnti reported on a long-term study of “born losers” in the market. One of the most common characteristics of this gloomy tribe, the two researchers determined, is “an overwhelming need to prove one’s own brilliance.” The need to feel and look smart undoubtedly exists in nearly every man and woman on earth. If it is well controlled, it can lead to admirable results. But if it becomes so overwhelming that it forbids you ever to admit you are wrong, even when all the factual evidence says plainly that you are, then the need becomes a cause of bad luck.

Dr. Ronald Raymond, a clinical psychologist who practices in Connecticut, finds that unlucky people often drift into marriages and other long-term relationships that they can guess won’t work. Quick action in the beginning can end a flawed relationship before it becomes an entanglement, but that action, of course, requires somebody to say, “I was wrong.” It may require one partner or both to go through the pain and embarrassment of calling off a wedding.

It is often “too late” for the unlucky. There is almost always a time at the start of any souring venture when the ratchet effect can be applied fairly easily and you can get out with a minor loss or none. But that time may pass very quickly. After it has gone, the glue of circumstance rapidly hardens around your feet. You are stuck, perhaps for life.

“It’s sad to think how many men and women are stuck in jobs they hate,” says Bill Battalia, the executive recruiter. “In a lot of cases these are people who could have made changes earlier in their lives. But the longer you stay with a job or career, the tougher it is to quit.”

The Second Obstacle: It’s too hard to abandon an investment

An investment may consist of money, love, time, effort, commitment, or a combination of any or all. Whatever it is made of, it is a cherished thing, a thing to be protected. If a venture of yours turns sour, the only way you are going to get out of it is to abandon what you have invested in it. That hurts at least as much as admitting you were wrong. Much more, sometimes. It hurts some people so much that they seem unable to do it at all. Thus they get thoroughly trapped in ill-fated ventures. They can only flounder helplessly as bad luck turns to worse luck.

Dr. E. Louis Mahigel, professor of communications at the University of Minnesota, is a man who knows much about poker and about the personalities of chronic losers and winners.

“An outstanding characteristic of the successful gambler, the pro,” he says, “is that he knows how and when to get out of a hand and cut his losses. Of course he knows all the mathematical odds by heart, which gives him an edge over most people he hustles, but his main edge is in the area of emotion. When the odds say he probably won’t win, he doesn’t argue, he just leaves his money in the pot and lays down his cards. The chronic loser isn’t emotionally equipped to do that. He’s so desperate not to lose his investment that he takes wild chances to protect it.”

The willingness to accept a string of small losses while waiting for a big gain: this is a key trait of all gamblers and speculators who succeed over a long term. All of them. It is also a key trait of lucky men and women in general. As Gerald Loeb put it, “Knowing when to sell out and having the guts to do it at the right time – this is an essential technique of successful living. It doesn’t apply only to stock speculation. It is better to use the technique inefficiently than never learn it at all.”

I once met a Swiss banker and self-made millionaire who summed up his investment philosophy thus: “If you are losing a tug-of-war with a tiger, give him the rope before he gets to your arm. You can always buy a new rope.” There are times in life when you must take a small loss to escape a big one. Probably almost everybody on earth older than ten, if questioned about this, would acknowledge its truth. But only the lucky seem able to act on it regularly.

Most lucky people whose lives I’ve studied have not been capricious in making their moves. They have not sought change for the sake of change itself – change prompted by chronic boredom or a childish hope that the grass would be greener behind the next fence. They have not job-hopped sideways, from one job to a similar job to yet another. Nor have they been multiple divorcees, stumbling in and out of personal commitments in a confused search for some unknown private bliss. A state of continual, restless, aimless bouncing doesn’t demonstrably increase the odds of finding good luck and indeed may lead directly to bad luck in some cases.

As far as luck is concerned, there seem to be only two useful reasons for making a change.

Boldness and the ratchet effect are twin components of the luck adjustment. Within limits, they enable you to select your own luck. You seize the good and discard the bad. It might be almost like picking apples from a barrel, except that it is much, much harder to do. It is so much harder that only a minority of men and women know how. We call them lucky.

Notice one last thing about boldness and the ratchet effect. They complement each other. If you are bold, your ratchet mechanism is likely to work fast and decisively when you need it. And if your ratchet is working reliably – if you have confidence that it won’t leave you stuck in wrong places – that fact can support your boldness.

The Pessimism Paradox

The words “lucky” and “optimistic” are somehow thought to belong together. When I began buttonholing lucky and unlucky people years ago I expected to find that the luckiest would be overwhelmingly optimistic. I was wrong.

Lucky people are generally happy, of course. We call them lucky and they so consider themselves because, partly through their own efforts and partly through the workings of chance (or fate or God or something else) they have reached personal goals that are important to them. It is accurate to call most of them pleased, contented, satisfied. They grin a lot. They are fun to be with. But to call them optimistic is to misuse the word. To be optimistic is to expect the best results. Lucky people, as a rule, don’t. In fact the majority of them nurture a basic core of pessimism so dense and tough and prickly that it startles you when you first come upon it. Yes: nurture. They tend their pessimism with loving care, guard it against assaults, exercise it daily to keep it lean and hard. Sometimes consciously and sometimes intuitively, they cherish it as a thing of value. To lose it would be to lose – well, luck.

It turns out that the uses of pessimism among the lucky can be articulated in terms of two cardinal laws. These laws interlock. They should be thought of together, for they are really two parts of one law.

Murphy’s Law

The law says, “If something can go wrong, it will.”

Lucky people are by definition people whom fortune has favored – but one reason why they are favored is that they never assume they will be. They know Fortuna is fickle. She caresses you fondly today, perhaps. Tomorrow she may kick you.

Never, never assume you are fortune’s darling. Just when life is at its best and brightest, just when you seem to be lifted up and nourished and protected by unassailable good luck – that is when you are most vulnerable to bad luck. That is when euphoria can melt your pessimism. When pessimism goes, you are in a state of peril. Your guard drops. You disconnect your ratchet mechanism. You disregard odd little hunches that are trying to tell you what you don’t want to hear. And then, suddenly, you are face-down in the mud with fortune’s foot on your neck.

This is part of the paradox. People who trust luck the most are among the least lucky. For Fortuna, when you lean against her too hard, often steps aside. Lucky people avoid accidents largely by being pessimistic. They ask, “What can go wrong when I paint the inside of this bedroom door? Of course! Even though I hang a sign on the other side, some nitwit will open the door at exactly the wrong moment. The door will hit me in the face. Or it will hit me in the elbow and make me drop my brush on the floor. Or it will knock over the paint can. Or all three. To insure my luck, I will behave as though all these things are certain to happen. I’ll put the can there, not here, and I’ll stand with my foot against the door…” By contrast, the unlucky tend to shrug and say, “Oh, I’ll trust to my luck. The odds are with me. It will only take me ten minutes to do the job. The kids aren’t around, and Grandfather is taking his nap in front of the TV set. . .” It can almost be predicted, of course, that this will be the one day of the year when Grandfather can’t sleep and comes blundering through the door in search of his spectacles.

The condition of feeling lucky can be a condition of great personal danger. Never let the feeling take root. Never forget Murphy’s Law.

Professional gamblers – the cool ones who win, as against the compulsive ones who lose – go further than that. To them, Murphy’s Law is too mild. They don’t merely expect something to go wrong. They expect it to go wrong in the worst possible way. They don’t prepare just for average bad luck, but for outrageously bad luck.

“The losers,” says one Las Vegas pro, “never do any thinking about the problem of ‘strain,’ as we call it. Strain means the demand on your gambling capital during a losing streak. You must have enough capital to absorb a string of losses while you’re waiting for the breaks to come your way. The more capital you have, the more strain you can take. What the losers around here do is, they always underestimate the strain. They go into a game with much too short a supply of cash. They figure, ‘Well, I’ve got plenty to see me through a run-of-the-mill losing streak.’ Every pro knows that isn’t the way things work. You’ve got to expect more than run-of-the-mill bad luck. You’ve got to be ready for hellish bad luck.”

Mitchell’s Law

“Life is slippery like a piece of soap. If you think you have a good grip on it, you are wrong.”

That is Mitchell’s Law. I attach her name to it mainly to give it a name. Other names might have served as well, for other men and women have articulated the law in their own words. Executive recruiter Bill Battalia, for instance: “People like to talk about planning their lives, but at least half the planning is done by luck or fate or whatever you want to call it. If a successful man comes up to me and says he planned his life just the way it turned out, I’ll tell him he’s suffering from a case of selective memory.” Or Kirk Douglas: “We like to think we control our lives, but it’s a damned illusion. There’s always the X factor. . .”

The X factor is luck. At the beginning of this book I defined luck as “events that influence our lives and are seemingly beyond our control.” If you think you can make your life immune to such events, you are deluded. The delusion can be dangerous.

No life is ever totally under the control of its owner. Lucky people are those who adapt to this environment of uncertainty. They ready themselves for its opportunities, guard themselves against its hazards. If a piece of good luck drifts by – as we’ve seen – they seize it instead of ignoring it and continuing to plod forward in a straight line toward some planned goal. If bad luck comes, they are poised to jump aside quickly before it engulfs them. As a tribe, the lucky harbor no delusions that life is orderly, that it can be planned with precision, that it will happen exactly as one wishes. Its disorderliness pleases and excites some but irritates others, just as it irritates the unlucky. The difference is that the lucky accept the disorder as a fact that must be dealt with, whether they like it or not.

The unlucky tend to argue with it instead of accepting it.

If you cling to an illusion of control, you open yourself to two kinds of danger. The first danger is that you won’t build defenses against the unknowable bad luck that at any hour could snatch control from your grasp. The second is that, when bad luck strikes, you will be too greatly demoralized. You will react in ways that are not useful.

Professional gamblers are smarter than many business people in this respect. In the words of Dr. Louis Mahigel, the former hustler turned college professor, “The pro knows that the results of a given card game will depend partly on luck and partly on skill. He is very, very careful to keep the two elements separate in his mind. He preys on suckers who, among their other problems, don’t separate the two. Typically, the sucker thinks he has more control than he has.”

If the sucker gets a string of good hands and amasses a pretty little pile of chips next to his elbow, he typically reacts in one of two ways. He thinks, “Wow, I’m smart!” Or he thinks, “Lady Luck is with me tonight! I can’t lose!” Either way he develops an illusion of mastery, a feeling that events are somehow under his control.

The hustler across the table, observing this, grows happy. He knows, now, that the sucker can be induced to bet large amounts on hands that are not worth a nickel. The sucker is not prepared for the luck of the game to change. He believes his skill or luck or both make him invincible. The hustler will reinforce this fallacy with carefully planted comments: “That was smart betting! . . . Man, you’re hot tonight!” The hustler has enough capital to take plenty of strain, and he waits patiently until good luck finally comes his way. Then he pounces.

The sucker will lose everything he won, plus all his capital – plus, if the hustler works him well, everything he can borrow.

It is always a mistake to be sure of your own grip on events.

Never ignore that possibility of bad luck. It is always there. Doubt your own grip on events. Be prepared for them to slide from your grasp at any time, in any direction, with any result.

We have looked at Murphy’s Law and Mitchell’s Law separately. Now let’s put them together and see what we have. Murphy’s Law counsels us not to depend too much on luck, for things are as likely to go wrong as right. Mitchell’s Law counsels us not to depend too much on our own control over events, for that control is less good than we sometimes like to think.

Both laws say:

Never enter a situation without knowing what you will do when it goes wrong.

That is the pessimism of the lucky. Buried amid the pessimism, however, is a particular little piece of optimism. For if bad luck can wrench control from our grasp, so can good luck.

The bold are ready to grab a piece of good luck when it drifts by, even if it means going off in a new, unplanned direction. They don’t try to control their lives so rigidly that they ignore lucky breaks lying off the main track.

Thus the pessimistic laws of Murphy and Mitchell can be said to have this optimistic corollary:

If something goes right, don’t argue.

Or to put it another way:

When good luck pulls you sideways, let go.

You might as well. Life is slippery no matter how you handle it. Perfect control is an illusion. Good luck.

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